Strix Group; trading update

Strix (KETL.L, Aim 100, Market cap. £274m, 144p, 4.3% of JIC Portfolio and 9.6% of JIC Top 10): 
Trading update for the year ended 31stDecember 2018

Conclusion: I am in this stock for its market leading position and for the free cash flow that generates. The share price has done well since the IPO in August 2017 but for such a relatively stable business has been more volatile in recent months than I expected. Hopefully todays reassuring update and a valuation that leaves the shares on a PE ratio of only 9.5x for 2019 and a prospective 2019 dividend yield of 5.4% will see the shares move up. A share price of 193p would see the it on a 2019 dividend yield of 4.0%, which probably would still look reasonable value. Happy Holder!

It says that it has delivered a strong performance in line with market expectations. Cash flow was strong resulting in a net debt position of £28m, better than expectations.

The global kettle market grew by about 7% with strong progress in North America, Russia and South East Asia offsetting softening in Europe, the UK and Turkey. It has maintained its global share of the kettle controls market at 38% by volume.

Its Aqua Optima (water filters) brand continues to grow and has increased its combined brand and private label share to more than 25% of the UK market.

Dividend: It confirms that it will pay total dividends for 2018 of 7.0p.

Results will be published on 21stMarch.

Mark Bartlett, Chief Executive Officer, said:

“Strix has achieved another strong performance in line with¬†market expectations. In particular, cashflow generation has been strong which has helped achieve an improved net debt figure, ahead of market expectations.

“We have maintained our strong global market position in the face of a competitive market environment, and have been largely unaffected by the uncertainty caused by Brexit and US trade tariffs¬†as a result of our diverse global presence. We have also¬†taken appropriate actions to mitigate future supply risks.¬†

“As a result, we look forward to the year ahead with confidence and have put in place the foundations to achieve our objectives for 2019.”¬†

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